Reference no: EM132521970
Question - The following events took place for Chi-lite Inc. during June 2016, the first month of operations as a producer of road bikes:
Purchased $400,000 of materials
Used $343,750 of direct materials in production
Incurred $295,000 of direct labor wages
Applied factory overhead as a rate of 75% of direct labor cost
Transferred $815,000 of work in process to finished goods
Sold goods with a cost of $789,000
Sold goods for $1,400,000
Incurred $316,000 of selling expenses
Incurred $125,000 of administrative expenses
Required -
a. Prepare the June income statement for Chi-Lite. Assume that Chi-Lite uses the perpetual inventory method.
b. Determine the inventory balances at the end of the first month of operations.